Most people don’t spend enough time thinking about estate planning, or think they are too young to worry about estate planning, so they never get around to it. The truth is that estate planning is an essential tool to help you distribute your assets and reduce disputes among your family once you have passed away. Not providing legal arrangements can become a devastating and painful mistake for your spouse and children afterwards. Here are some common and famous examples of what can happen when you don’t arrange proper estate planning.
Example #1: Second Wife Doesn’t Get Along With Sons
The father wants to pass on everything to his sons and creates a living trust for his sons but does not transfer his new residence into the trust. After he dies, the wife takes the residence as the surviving joint tenant. The wife also takes possession of bank accounts and retirement accounts for which he forgot to change the name of the beneficiary. The sons and the wife are now fighting over control of assets. Some of the property within the residence was explicitly given to the sons, but the wife will not allow them on the property. This situation creates a costly legal dispute.
Example #2: Mother and Disabled Daughter
The mother dies and does not create any type of trust or will. The disabled daughter receives all of her assets, including retirement accounts, because she is named as the beneficiary. These assets make the daughter ineligible for her disability and government healthcare benefits. The daughter does not know what to do, doesn’t take the required disbursements from the retirement accounts, and starts accumulating government tax penalties. Her attorney has to petition the court to set up a special needs trust to help her manage the assets.
Example #3: Chief Justice Warren Burger Writes His Own Will
The chief justice makes several mistakes in his will, and his estate ends up having to go to probate. During the lengthy probate process, his family pays additional taxes and fees that add up to hundreds of thousands of dollars.
Example #4: Elvis Presley Does Not Establish an Estate Plan
This is actually one of the most famous celebrity estate planning failures. He does not make proper legal arrangements to distribute his estate, so that a large amount of his assets must go through a probate process. Because of the lengthy and expensive process, his estate is reduced by over 70%. His family pays millions of dollars in taxes, fees, and legal costs.
Even if you think it is too early to set up your estate plan, you should start looking into your options now. As you can see, there are countless examples of what can happen if you don’t make the proper arrangements while you still have time. Our attorneys can help explain the common ways to distribute your estate and can help you write your estate planning documents. If you are interested in creating a will or establishing a trust, give us a call today.
